Are you a bargain shopper? Saving money and finding the best deals on the things you buy is important, especially to those of us that are working toward building wealth and a financially stable lifestyle and retirement. From groceries and gas to clothing and entertainment, doing the research required to find the lowest prices available almost always pays off in the long run. This is particularly true when it comes to real estate investing and it’s exactly why finding opportunities at low and discounted prices is a priority for investors.
Each day, middle-class Americans are discovering the cash flow revenue benefits of real estate investing, and they’re finding the best deals are just down the street. In fact, the vast majority of investment properties aren’t seaside bungalows, lakefront cabins, or even high-rise condominiums – they’re single-family homes in average neighborhoods all across the country.
Most of the properties available at these bargain prices are among what is known as distressed inventory and are in danger of being foreclosed on by a bank or lender. For homes in this situation, investors will usually purchase them through a process called a short sale. In this type of transaction the bank or lender agrees to accept an offer that is less than what is owed on the mortgage. The result is that these properties can be purchased at a price significantly lower than the actual value of the home.
If a home has already been foreclosed on, it becomes a “Real Estate Owned” or REO property. In order to sell these homes quickly, they are priced at rates, on average, 30% lower than their market value, which also makes them very attractive to investors.
Today’s savvy investors are wisely taking advantage of lower cost assets that will generate fantastic cash flow opportunities through monthly rental income. At the same time, the recovering housing market continues to encourage overall value and price appreciation for a profitable sell-off in the future. These two factors combined make this truly one of the best times in history to get into real estate investing.